Three city hostels are to be given a £3 million upgrade to ensure that more homeless families can be kept out of grotty bed and breakfast accommodation.

Birmingham City Council’s three centres in Bournville,Nechells and Northfield provide places for families in crisis, including those fleeing domestic abuse as well as those whose homes suddenly become uninhabitable.

The centres cater for 107 households in total and will get new kitchens and bathrooms, carpets, boilers, rewiring and structural works to ensure they are up to scratch.

Cabinet Member for health and wellbeing, Coun Steve Bedser (Lab, Kings Norton) said: “These centres provide a vital safety net for some of the most vulnerable people in Birmingham at times of real crisis.

“They are staffed 24 hours a day, 365 days a year, ensuring that we keep many people out of less suitable bed and breakfast accommodation and this work will make a huge difference.

“I visited the three centres before this report was compiled and believe the work is absolutely essential if we are to offer the best possible assistance to vulnerable people in desperate need.”

Birmingham City Council currently has to accommodate about 200 new homeless households a month in temporary housing, some for a few days and some for many months. As well as the three homeless centres, some council housing is used, private rented housing and, as a last resort, bed and breakfasts.

According to a report to the council’s cabinet, by running its own hostels the city council saves about £1.1 million a year compared to using bed and breakfast accommodation.

In 2010 there were 331 Birmingham families staying in bed and breakfast rooms, but by November last year this had fallen to 108.

Increasing numbers of homeless families from London and cities like Oxford are being sent to Birmingham bed and breakfasts after being priced out of homes in their own areas.